CBA Bank to offer liquidity for mobile phone bond
Kenyan lender CBA Group has agreed to make a market for the country’s debut mobile phone-based bond, guaranteeing investors an exit whenever they need it, officials said on Tuesday.
Kenya raised 150 million shillings ($1.45 million) with the three-year bond, called M-Akiba, becoming the first in the world to issue a government bond exclusively via mobile phone.
“They (CBA) will be the buyer to every seller and a seller to every buyer,” said Geoffrey Odundo, the chief executive of the Nairobi Securities Exchange.
CBA’s status as a market maker for the new bond followed negotiations with the government. Neither parties disclosed the costs of the provision of liquidity for the three-year life of the bond.
CBA was the first to start offering saving and lending products on mobile phones. In 2012, it launched M-Shwari on the M-Pesa mobile cash platform, owned by telecoms operator Safaricom.
More than the equivalent of $1.5 billion has since been lent to customers on M-Shwari since then in Kenya and in neighboring nations where CBA operates, the bank said.
The second tranche of M-Akiba, worth 4.85 billion shillings is set to open in June.
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